What is a Bitcoin?

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Bitcoin is a peer-to-peer currency. Peer-to-peer means that no central authority issues new money or tracks transactions. These tasks are managed collectively by the network.

A Bitcoin is the base currency of the Bitcoin market. It is like how we reference a Dollar or a Euro, and like the different currencies in the world, the Bitcoin trades at different values based primarily on speculation, supply and demand.

One of the most attractive features of Bitcoins is that they are not controlled by any government. They cannot be artificially inflated or deflated. A monetary authority cannot pump more of them into the market to boost the economy. Basically, there is a set amount going out over time and as time goes on the amount entering the market decreases.

The way that they are entered into the market is a process called “Mining“. Basically, computers solve mathematical algorithms to earn the Bitcoins. They are very complex and take a lot of computing power to solve. The more computers trying to solve the equations, the harder the equations become to solve, the less you get for mining.

Here is a video by Ben Swann on Bitcoin:

Bitcoin Video Crash Course

Know more than 99% of the population about Bitcoin. One email a day for 7 days, short and educational (guaranteed).

Okay, but how does solving an algorithm create monetary value, aka Bitcoin? And what is the deal with finding hashes?” And finally, where do the algorithms come from to begin with? (private interprise, government, education?)